KCC Full Form-Kisan Credit Card

Kisan Credit Card (KCC): A Comprehensive Guide for Farmers in India 

Introduction 

Agriculture is the backbone of India’s economy, with millions of farmers depending on it for their livelihood. However, access to affordable credit remains a challenge for many farmers, limiting their ability to invest in better seeds, fertilizers, and equipment. To address this issue, the Government of India introduced the Kisan Credit Card (KCC) scheme in 1998.

The KCC scheme, implemented by NABARD (National Bank for Agriculture and Rural Development), provides timely and hassle-free credit to farmers at affordable interest rates. This article delves into the features, benefits, eligibility, application process, and challenges associated with the Kisan Credit Card. 

What is the Kisan Credit Card (KCC) Scheme? 

The Kisan Credit Card (KCC) is a specially designed credit facility that provides short-term and long-term loans to farmers for agricultural and related activities. It helps farmers meet crop production expenses, post-harvest costs, and emergency financial needs while ensuring financial inclusion in rural India. 

This scheme was introduced by the Reserve Bank of India (RBI) and NABARD to reduce farmers’ dependence on unorganized moneylenders and provide them with institutional credit at lower interest rates. 

Key Features of the Kisan Credit Card 

1. Instant Access to Credit: 

a. Farmers get a revolving credit facility to meet their agricultural expenses. 

2. Affordable Interest Rates: 

a. Interest rates on KCC loans are much lower than regular agricultural loans. 

b. The government provides interest subvention for timely repayment. 

3. Flexible Loan Repayment: 

a. Loan repayment is linked to the harvesting period, giving farmers flexibility. 

4. Crop Insurance Coverage: 

a. KCC holders get insurance coverage under the Pradhan Mantri Fasal Bima Yojana (PMFBY). 

5. Credit for Allied Activities: 

a. Funds can be used for dairy, poultry, fisheries, and other allied agricultural activities. 

6. ATM-Enabled Debit Card: 

a. Farmers receive a KCC ATM card for easy cash withdrawals and transactions. 

Eligibility Criteria for KCC 

Farmers meeting the following criteria can apply for a Kisan Credit Card: 

1. Individual farmers, tenant farmers, and sharecroppers engaged in agriculture. 

2. Self-help groups (SHGs) or joint liability groups (JLGs) involved in farming. 

3. Dairy, poultry, and fishery farmers are also eligible under extended KCC schemes. 

4. Small and marginal farmers practicing horticulture or allied agricultural activities. 

How to Apply for a Kisan Credit Card? 

Applying for a Kisan Credit Card is simple and can be done through government-approved banks. Here’s a step-by-step guide: 

Step 1: Visit the Bank 

• Farmers can visit any commercial bank, regional rural bank (RRB), or cooperative bank offering KCC services. 

• The State Bank of India (SBI), Punjab National Bank (PNB), and other nationalized banks provide KCC facilities. 

Step 2: Fill the Application Form 

• The KCC application form can be obtained from the bank or downloaded from the bank’s website. 

• Required details include personal information, land details, and cropping pattern. 

Step 3: Submit Required Documents 

• Identity Proof: Aadhaar Card, PAN Card, or Voter ID. 

• Address Proof: Ration Card or Electricity Bill. 

• Land Ownership Proof: Land records, tenancy agreements, or lease documents. 

• Bank Account Details for fund disbursal. 

Step 4: Loan Processing & Approval 

• The bank evaluates the application, checks creditworthiness, and determines the loan limit. 

• Once approved, the KCC and ATM-enabled debit card are issued to the farmer. 

Step 5: Avail Credit 

• Farmers can withdraw the sanctioned amount as needed for farming activities. 

• They need to repay the loan within the prescribed period to avail interest benefits. 

Interest Rates & Repayment under KCC 

1. Basic Interest Rate: Starts from 4% per annum, depending on the bank and loan amount. 

2. Interest Subvention Scheme:  

a. Farmers who repay their loans on time get an additional interest subvention of 3%. 

b. This reduces the effective interest rate to as low as 4%. 

3. Loan Repayment Period:  

a. Short-term loans must be repaid within 12 months. 

b. Long-term loans have a repayment period of up to 5 years. 

Benefits of Kisan Credit Card 

1. Financial Inclusion 

• Provides easy access to institutional credit for farmers, reducing dependence on moneylenders. 

2. Lower Interest Rates 

• Farmers get subsidized loans with low interest rates and repayment flexibility. 

3. Quick and Hassle-Free Loan Process 

• The minimal documentation and quick processing make it farmer-friendly. 

4. Insurance & Security Benefits 

• Provides crop insurance coverage to protect against losses due to natural calamities. 

5. Multi-Purpose Credit Facility 

• Covers expenses for crop cultivation, post-harvest needs, and allied activities. 

Challenges of the KCC Scheme 

1. Lack of Awareness: 

a. Many small farmers are unaware of KCC benefits and continue borrowing from informal sources. 

2. Complicated Bank Processes: 

a. Some banks still have lengthy procedures that discourage small farmers from applying. 

3. Delayed Loan Disbursement: 

a. Bureaucratic delays sometimes affect timely credit availability for farmers. 

4. Fraudulent Practices: 

a. Instances of fraudulent activities and misuse of KCC benefits by intermediaries. 

 The Kisan Credit Card (KCC) scheme is a lifeline for Indian farmers, offering quick, affordable, and flexible credit to support agricultural activities. By reducing dependence on moneylenders and providing low-interest loans, KCC plays a crucial role in strengthening financial inclusion and rural economic growth.